ING says Hungary recorded a stronger-than-expected jump in wages during February, briefly restoring double-digit real wage growth as low inflation boosted household purchasing power.
According to the latest figures from the Hungarian Central Statistical Office, average gross wages rose 9.7% year-on-year in February, ahead of market expectations and up from an adjusted 8.3% increase in January. ING noted that January data had been distorted by a one-off six-month bonus payment to military and law enforcement employees, making February a clearer indicator of underlying wage trends.
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Net earnings increased even faster, helped by expanded family tax allowances and benefits for mothers introduced this year. More notably, median wages climbed 11.8%, close to the recent rise in Hungary's minimum wage. This suggests stronger pay gains in lower income brackets and growing wage compression, as employers raise salaries to maintain pay differentials.
Because inflation remained exceptionally low, real wage growth reached 10.5% in February, meaning earnings increased faster than consumer prices. ING described this as a temporary comeback for double-digit real wage growth rather than the start of a lasting trend.
Wage momentum was broad-based across major sectors. Growth accelerated in manufacturing, where ING believes new factories may be hiring at higher wages while weaker subsectors reduce lower-paid jobs. Strong increases were also seen in utilities, water and waste management.
Looking ahead, ING still forecasts annual wage growth of around 9% to 10% for Hungary in 2026. However, the bank expects the recent boost to real incomes to fade quickly as inflation rises again, driven largely by higher energy costs linked to conflict in the Middle East.
The bank also warned that a weaker economic outlook may make it harder for companies to pass on rising labour costs. If margins come under pressure, employers could respond with more aggressive workforce reductions, creating fresh risks for Hungary's growth prospects.
For now, Hungarian households have enjoyed a short-lived improvement in purchasing power, but ING suggests that higher inflation and a softer economy are likely to erode those gains later this year.
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